1. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-1 Chapter 7 Ethics and Information Technology Understanding Business Ethics Stanwick and Stanwick 1 st Edition

2. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-2 Ethical Thought “Computes are like old testament gods, lots of rules and no mercy.” –Joseph Campbell

3. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-3 We Thought You Wanted the Extra Pillow Ritz Carlton Mystique Program – accumulates ‘relevant’ information pertaining to guests (preferences of guests) Justified as a way to capture information about guests so adjustments can be made if the preferences of the guests change over time Marriott transfers customer preference information to all twenty six hundred properties as soon as it is available

4. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-4 Information Technology Ethical Issues Importance can be seen through an AMA/ePolicy Institute survey: –26% of firms reported they had fired workers due to misusing the Internet –25% reported they had fired employees for misuse of their corporate email accounts –6% of the respondents reported that they had fired employees for misuse of the corporate telephone

5. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-5 Information Technology Ethical Issues Importance can be seen through an AMA/ePolicy Institute survey: –76% reported they had monitored employees’ computers to determine which Web sites had been selected –65% of the firms stated they used software to block connections to inappropriate websites –36% monitored keystrokes, amount of time spent on the computer and the content

6. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-6 Information Technology Ethical Issues Importance can be seen through an AMA/ePolicy Institute survey: –50% saved and reviewed computer files of their employees –55% retained and reviewed email messages sent and received by their employees –80% notified their employees they were monitoring these things

7. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-7 Information Technology Ethical Issues Importance can be seen through an AMA/ePolicy Institute survey: –82% told the employees they were saving and receiving their computer files –86% told employees that their email was being monitored –89% told their employees that access to certain Web sites was blocked

8. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-8 Information Technology Ethical Issues Importance can be seen through an AMA/ePolicy Institute survey: –84% of the firms had a formal email policy in place –81% had a personal Internet use policy –42% had a personal instant messenger use policy –34% had a policy that explained when employees could access the Internet for personal use during company time –23% of the firms had a policy pertaining to the use of personal postings on corporate blogs –20% had a policy pertaining to the use of personal blogs during company time

9. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-9 Information Technology Ethical Issues Importance can be seen through an AMA/ePolicy Institute survey: –20% have had email subpoenaed for legal cases –13% had to address workplace lawsuits that were the result of employee email

10. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-10 Four Schools of Ethical Thought Phenomenology vs. Positivism –What should I do? Phenomenologists believe that doing good is based on the specific circumstances and that the decision is based on using logic to develop a good and ethical resolution to the issue Positivists believe in observing the behavior of those individuals who are in society and based on those actions, conclude what is good and ethical behavior

11. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-11 Four Schools of Ethical Thought Rules vs.. Consequences –Rules based ethicists believe in following generally accepted universal rules that will guide individuals to behave in a good ethical manner – religious beliefs, intuition, social norms –Consequences/ Results based ethicists believe that rules are not enough to guide the ethical behavior, but that consequences of the actions must be considered

12. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-12 Four Schools of Ethical Thought Individuals vs. Collectivities –Moral authority is perceived to come from the decision maker – individual level –Moral authority perceived to come from a larger body than just one individual – like firm or society – collective level

13. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-13 Four Schools of Ethical Thought Collective Rule Based Ethics –Ethical behavior can be guided by rules ant the rules can be developed and implemented based on rational logical thought Individual Rule Based Ethics –Based on understanding that the individual knows within himself what is right and wrong Collective Consequentialists –Have the same focus as utilitarians – review the ethical issues to determine how the consequences will impact others – bring greatest good for greatest number of people Individual Consequentialists –Believe that each individual needs to determine his self interest to help guide ethical behavior – individuals will do good things that will benefit others as well as support their self interests

14. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-14 Management Issues for Information Technology Agent for stockholders – utilize technology to enhance level of competitiveness Ensure rights and needs of other stakeholders are not sacrificed to maximize the firm’s level of profitability Privacy, ownership, control, accuracy, security

15. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-15 Policy Areas to Address Technology Management Issues Data Policy –A declaration to the stakeholders of their commitment to being good stewards of the data –Privacy, control, accuracy, security Intellectual Rights Policy –Clearly spell out what intellectual property is owned by the employee and what is owned by the firm –Standard to say that since the employee is using assets of the firm, any intellectual property developed in the workplace belongs to the firm Workers’ Rights Policy –Explain what conditions the employees may be subject to during their employment with the firm – type of monitoring, type of information collected pertaining to the employee, identification of private and public information

16. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-16 Critical Analysis to Assist in Decision Making Stakeholder Analysis Utilitarian Goal-based Analysis – greatest good for greatest number of stakeholders Rights-based Analysis – consider how each decision/option will impact the rights of each stakeholder Duty-based Analysis

17. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-17 Privacy of Employees Email –Consider that most email messages are not private –1986 Electronic Communications Privacy Act: employers can consider email messages as corporate property –www.enronemail.com – 515,000 emails have become public documentswww.enronemail.com –Many users are inexperienced or lack understanding –Vague or nonexistent policies exist

18. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-18 Costs and Benefits of Using Email Benefits –Cost benefits –Efficiency –Documentation –Access to resources –Monitoring Costs –Offensive communications –Frivolous use –Information overload

19. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-19 Types of Computer Monitoring Software –Allows the employer to see what is on the computer screen in an employee’s office or allows the employer to view the information stored on the hard drive –Allows the employer to determine how long a computer has been idle –Suggests that the employee is not doing his job

20. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-20 Is an invasion of privacy justifiable by an employer? Criteria to consider: 1.For what purpose is the undocumented personal knowledge sought? 2.Is this purpose a legitimate and important one? 3.Is the knowledge sought through invasion of privacy relevant to its justifying purpose? 4.Is invasion of privacy the only or the least offensive means of obtaining the knowledge? 5.What restrictions or procedural restraints have been placed on the privacy-invading techniques? 6.How will the personal knowledge be protected once it has been acquired?

21. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-21 Telephone Monitoring 1986 Electronic Communications Privacy Act – allows monitoring of business related phone calls If the phone call is personal in nature, the monitoring must cease, but if told that personal calls are prohibited, the calls can be monitored Cell phones create even further issues

22. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-22 Privacy of Customers Companies employ technology that allows them to make inferences about customers that many may not even know the company is making Companies use business intelligence systems: monitor what kinds of products are ordered, how much is being spent and how often the customer makes purchases

23. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-23 The Challenge of Technology - Ethical Issues Facing Internet Usage Security transactions Illegal activity (fraud, hacking, etc) Privacy Honesty/truthfulness Judged by same standards as other mediums Pornography Product warranty Plagiarism Targeting children Unsolicited email False advertising

24. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-24 The Role of Government Regulations Should there be a government agency charged with policing the Internet? Would regulation be considered a violation of our First Amendment rights? Censorship?

25. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-25 Global Government Regulations Sarbanes Oxley Act The World Intellectual Property Organization (Digital Millennium Copyright Act) The European Union’s Electronic Commerce Directive The European Union’s Rome II Directive

26. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-26 Government Regulations Being Considered by Congress Consumer Privacy Protection Act Electronic Privacy Protection Act The Privacy and Identity Protection Act The Notice of Electronic Monitoring Act The Consumer Internet Privacy Enhancement Act The Secure Online Communication Enforcement Act Children’s Privacy Protection and Parental Empowerment Act

27. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-27 Types of Internet Fraud Auction and Retail Schemes Business opportunity or ‘work at home’ schemes Identity theft and fraud Market manipulation schemes Credit card schemes

28. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-28 Phishing Use of email to try to mimic a legal, legitimate company to ‘fish’ for personal or financial information from individuals May even contain computer viruses in the emails Could be committing: identity theft, wire fraud, credit card fraud, bank fraud, computer fraud

29. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-29 Operation Web Snare June 1, 2004 until August 26, 2004 FBI tried to target and convict cyber criminals –Criminal spam, phishing, spoofed or hijacked accounts, international reshipping schemes, cyber extortion, auction fraud, credit card fraud, intellectual property rights fraud, computer intrusions or hacking, economic espionage or theft or trade secrets, international money laundering, identity theft

30. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-30 Types of Fraud Targeted in Operation Web Snare Criminal spam Phishing Spoofed or hijacked accounts International reshipping schemes Cyber extortion Auction fraud Credit card fraud Intellectual property rights fraud Computer intrusions or hacking Economic espionage or theft of trade secrets International money laundering Identity theft More ‘traditional’ online crimes

31. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-31 Internet Attacks Cyber terrorism: the use of computer technology to commit terrorism crimes Vulnerable industries: defense contractors, medical and health care companies, pharmaceutical companies, financial institutions Spyware: software that can be loaded onto a computer so the computer operations can be monitored by an outside party without the consent of the computer user

32. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-32 The USA Patriot Act Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and obstruct Terrorism Act Provides expanded government authority over electronic communications and the use of compute and monetary transactions Designed to monitor the activities of financial institutions – broadly defined

33. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-33 Questions for Thought 1.In the opening scenario for this chapter, hotel chains are described as collecting data about customers without their knowledge. Do you view this as a violation of your rights? Why or why not? 2.Analyze the costs and benefits of using e-mail presented in Table 7-3. these pertain to an employer’s perspective. Prepare another table that presents the employee’s perspective. 3.One of the biggest issues facing technology is that of illegally downloading music from the Internet. Survey ten people about illegal downloading. Ask them the following: a.Have you ever downloaded music from the Internet? b.Why or why not? Summarize your findings.

34. Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 7-34 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.